The market has been battered by reports of continuing home price depreciation with both the ""Clear Capital"":http://dsnews.comarticles/home-prices-have-officially-double-dipped-clear-capital-2011-05-04 and ""S&P/Case-Shiller"":http://dsnews.comarticles/case-shiller-index-officially-double-dips-2011-05-31 indices confirming that national readings have fallen below the double-dip mark to touch new cycle lows.[IMAGE]
But data released Wednesday by ""CoreLogic"":http://www.corelogic.com provided a flicker of improvement -- at least from the short-term view -- in what has been a protracted and unforgiving downward spiral.
The company says its index shows that home prices in the U.S. rose 0.7 percent between March and April, the first such increase since the homebuyer tax credit expired in mid-2010. However, national home prices are down 7.5 percent compared to April 2010, after an annual drop of 6.8 percent reported for March 2011.
Ã¢â‚¬Å“While the economic recovery is still fragile and one data point is not a trend, the month-over-month increase based on April sales activity is a positive sign,Ã¢â‚¬Â said Mark Fleming, chief economist for CoreLogic. Ã¢â‚¬Å“This is the first month-over-month increase in the [home price index] [COLUMN_BREAK]
since government support for home buying was removed, and it provides reason for cautious optimism.Ã¢â‚¬Â
CoreLogicÃ¢â‚¬â„¢s reading includes distressed transactions involving REOs and short sales, which have been blamed for dragging down overall price trends for residential properties. The impact of distress has become more pronounced in recent months as these homes have claimed a larger share of sales activity, particularly in foreclosure hotspots.
To illustrate the divergence in distressed and traditional pricing, CoreLogic provides a separate measurement that excludes distressed transactions.
When you take REOs and short sales out of the equation, the company found that prices declined by just 0.5 percent in April compared to a year earlier, versus the 7.5 percent drop in the distress-included index.
But with pre- and post-foreclosure sales accounting for such a large share of the market, their influence on the trajectory of prices has been widespread. According to ""the latest assessment"":http://dsnews.comarticles/reos-and-short-sales-slip-to-37-of-aprils-existing-home-volume-2011-05-19 from the National Association of Realtors, distressed homes accounted for 37 percent of existing-home sales in April and typically sold for a discount of about 20 percent.
Including distressed sales, CoreLogic says the five states with the highest home price appreciation in April were: North Dakota (+4.2 percent), Vermont (+3.4 percent), New York (+3.2 percent), the District of Columbia (+2.2 percent), and Mississippi (+1.4 percent).
The five states with the greatest depreciation were: Idaho (-15.2 percent), Michigan (-13.2 percent), Arizona (-11.9 percent), Rhode Island (-11.6 percent), and Nevada (-11.4 percent).